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Hudson's Bay Company Sustainability Report 2019

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Hudson's Bay Company Sustainability Report 2019 HUDSON’S BAY COMPANY SUSTAINABILITY REPORT Hudson’s Bay Company Sustainability Report 2019 2 Founded in 1670, HBC OVERVIEW is the oldest company in ETHICAL North America. From the SOURCING earliest days, we’ve embraced innovation and adventure, and ENGAGING 3 6 9 OVERVIEW ETHICAL SOURCING ENGAGING OUR PEOPLE learned to change with the OUR PEOPLE 4 Where We Are 7 Our Approach to times. This tradition continues INVESTING IN OUR Sourcing 10 Our Approach to today as we commit to meeting Our Approach COMMUNITIES 5 Talent Management our customers’ evolving to Sustainability 8 Factory Audits and CONTRIBUTING Results 11 Diversity and Inclusion needs, while addressing the TO A SUSTAINABLE pressing challenges facing our Learning and Development ENVIRONMENT 11 communities and planet. 12 Health and Well-being UN GLOBAL COMPACT COMMUNICATION OF PROGRESS About This Report In this report, we outline the 2019 sustainability management approaches, highlights and initiatives undertaken in our North American businesses, including Hudson’s Bay, Saks Fifth 13 18 21 Avenue, and Saks OFF 5TH. As a signatory to INVESTING IN OUR CONTRIBUTING UN GLOBAL COMPACT the United Nations Global Compact, this report COMMUNITIES TO A SUSTAINABLE COMMUNICATION also meets our commitment to submit an annual ENVIRONMENT OF PROGRESS Communication of Progress. All dollar amounts 14 Our Approach to Giving are in Canadian dollars, and all performance 19 Our Approach to data refers to the 2019 calendar year, unless 15 Focus on Mental Health otherwise stated. The 2019 Sustainability Report Environmental is available exclusively online on our corporate 17 Supporting Canadian Stewardship website at hbc.com. Athletes 20 Operational Footprint Hudson’s Bay Company Sustainability Report 2019 3 OVERVIEW Where We Are Our Approach to Sustainability ETHICAL SOURCING ENGAGING OUR PEOPLE INVESTING IN OUR COMMUNITIES OVERVIEW CONTRIBUTING TO A SUSTAINABLE ENVIRONMENT HBC is a diversified retailer focused on driving the performance of high-quality stores and 244 stores their omni-channel platforms and unlocking the value of real estate holdings. Founded in UN GLOBAL COMPACT 1670, HBC is the oldest company in North America. HBC’s portfolio today includes formats COMMUNICATION ranging from luxury to premium department stores to off price fashion shopping destinations, OF PROGRESS ~39,000 with nearly 250 stores and approximately 39,000 employees around the world. associates HBC’s leading businesses across North America include Saks Fifth Avenue, Hudson’s Bay, and Saks OFF 5TH. HBC also has significant investments in real estate joint ventures. It has partnered with Simon Property Group Inc. in the HBS Joint Venture, which owns properties in the United States. In Canada, it has partnered with RioCan Real Estate Investment Trust in the RioCan-HBC Joint Venture. Hudson’s Bay Company Sustainability Report 2019 4 OVERVIEW Where We Are Where We Are We serve customers in prime urban and suburban markets Our Approach across North America with nearly 250 stores and our to Sustainability businesses’ digital platforms. ETHICAL SOURCING ENGAGING OUR PEOPLE INVESTING IN OUR COMMUNITIES 89 stores 41 stores Canada 3 Canada / 37 United States CONTRIBUTING TO A SUSTAINABLE thebay.com saksfifthavenue.com ENVIRONMENT UN GLOBAL COMPACT COMMUNICATION OF PROGRESS Corporate locations 114 stores 19 offices, distribution 18 Canada / 96 United States centers, call centers saksoff5th.com 8 Canada / 9 United States / 1 Ireland / 1 India hbc.com Hudson’s Bay Company Sustainability Report 2019 5 OVERVIEW Our Approach to Sustainability Where We Are Our approach to sustainability is built around four pillars of action, which are integral to our company and critical for driving the long-term success of our businesses. Through these Our Approach to Sustainability pillars, we enable our associates, customers and vendors to make a positive impact on social Codes of Conduct and environmental issues that matter to us all. The HBC Code of Business ETHICAL Conduct (the Code) and SOURCING Supplier Code of Conduct set out the behaviors we expect of ENGAGING ourselves and of our suppliers. OUR PEOPLE Each year, associates across all businesses receive training on INVESTING IN OUR the Code and related policies COMMUNITIES that are at the core of how we ETHICAL ENGAGING INVESTING CONTRIBUTING do business. They must also CONTRIBUTING SOURCING OUR PEOPLE IN OUR TO A SUSTAINABLE digitally acknowledge that they TO A SUSTAINABLE agree to adhere to these policies. COMMUNITIES ENVIRONMENT ENVIRONMENT We are determined We offer our Training in 2019 included, to build our business associates a wealth of Our company’s success We challenge but was not limited to, basic principles, conflicts of interest UN GLOBAL together with our career development is inextricably linked to ourselves to reduce and associate responsibility. COMPACT suppliers based on and advancement the social and economic our environmental COMMUNICATION the principles of trust, opportunities, and a well-being of our impact, recognizing the OF PROGRESS teamwork, honesty and culture that empowers associates, customers connections between a respect for the rights them to think and act and communities, healthy planet, healthy of others. like owner-operators. and we work to help communities and a them thrive. sustainable future for us all. Hudson’s Bay Company Sustainability Report 2019 6 OVERVIEW ETHICAL SOURCING Our Approach to Sourcing Factory Audits and Results ENGAGING OUR PEOPLE INVESTING IN OUR COMMUNITIES ETHICAL CONTRIBUTING TO A SUSTAINABLE ENVIRONMENT SOURCING UN GLOBAL COMPACT COMMUNICATION OF PROGRESS We hold ourselves and our suppliers to high standards of responsible, 711 factories sustainable and socially aware business practices. Ethical conduct, approved for production based on their labor, human rights and environmental protection are the foundation 2019 social compliance audit scores of our Supplier Code of Conduct. We partner with suppliers and industry peers to continually improve working conditions in the ~280,000 factory workers factories that manufacture products on our behalf. covered by HBC’s mandatory social compliance program in 2019 Hudson’s Bay Company Sustainability Report 2019 7 OVERVIEW Our Approach ETHICAL SOURCING to Sourcing Our Approach We believe that we have a responsibility to to Sourcing uphold fundamental human and labor rights, as well as to be mindful of our environmental Factory Audits and Results impact throughout our supply chain. A critical way to ensure our suppliers comply with local ENGAGING OUR PEOPLE laws and the HBC Supplier Code of Conduct is through our mandatory Social Compliance Program. The program applies to all first-tier suppliers producing private label INVESTING IN OUR merchandise for HBC and any non-merchandise items that COMMUNITIES have one of HBC’s company logos, such as shopping bags and gift boxes. CONTRIBUTING TO A SUSTAINABLE To work with HBC, these suppliers are required to ENVIRONMENT disclose the names and addresses of their factories and subcontractors. Since 2014, we’ve been publishing on our corporate website a list of factories that produce private UN GLOBAL brand apparel and home products for us. COMPACT COMMUNICATION Factories must also submit third-party audit reports OF PROGRESS from accredited organizations to demonstrate that their employees are paid a fair wage, their working conditions are safe and clean, and all social and environmental aspects of production and the surrounding communities are Learn more considered. From these reports, we may approve a factory HBC Supplier Code of Conduct for production, approve production subject to required improvements, or decide against or discontinue sourcing HBC Manufacturers List from that factory. California Transparency in Supply Chains Act Disclosure Hudson’s Bay Company Sustainability Report 2019 8 OVERVIEW Factory Audits and Results ETHICAL amfori BSCI Audits commonly observed during audits: social management SOURCING HBC is a long-time member of amfori BSCI (formerly systems, occupational health and safety, fair remuneration known as the Business Social Compliance Initiative), and decent working hours. They are designed to educate Our Approach We accepted 432 a leading supply chain management system that helps factory managers on how to create a fair and equitable to Sourcing companies drive social compliance and improvements work environment for their employees. We strongly believe non-BSCI audit within the factories in their global supply chains. As a that with this knowledge, producers will be able to fix the Factory Audits reports in 2019, member, HBC must adhere to the 11 principles of amfori key issues contributing to violations and improve their and Results long-term performance. which accounted for 61% of all BSCI’s code of conduct and ensure that our factories are audit reports received. socially responsible. ENGAGING Alternative Audits OUR PEOPLE We encourage our suppliers to use the amfori BSCI social Factories may also submit a third-party audit report auditing methodology, which rates factories on a scale Of the 711 factories produced by an HBC-approved social audit standard, such from A to E, where A is outstanding and E is unacceptable. INVESTING IN OUR as the Social Accountability International (SA8000), approved for We then collaborate with the auditors, vendors and factory COMMUNITIES SEDEX Members Ethical Trade Audit (SMETA) or managers to help implement corrective action plans production, Worldwide Responsible Accredited
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